Ally Financial's profit more than doubles on one-time gain

Ally Financial Inc, the largest US auto lender, reported a quarterly profit that more than doubled, helped by a one-time after-tax gain of about $400 million, related to a stake sale in its joint venture with a Chinese auto lender.
Shares of Ally, the former in-house financing arm of General Motors Co, were up 3.4 percent at $21 in late morning trading, after it also reported a 6.5 percent rise in loan originations at its core auto finance business.
Net income rose to $576 million, or $1.06 per share, for the first quarter ended March 31, from $227 million, or 33 cents per share, a year earlier.
Ally completed the sale of its 40 percent interest in the joint venture to General Motors Co for $1 billion in January.
The company's core business of making US auto loans got a boost, as its non-GM, non-Chrysler originations increased by about 54 percent to $2.7 billion. Total originations for the quarter were $9.8 billion.
"The most important takeaway from the quarter was the company's progress in diversifying its loan and lease originations," BTIG analyst Mark Palmer wrote in a note.
General Motors decided to replace Ally with its current in-house financing arm, General Motors Financial Co Inc, for subsidized leases on Buick, GMC and Cadillac vehicles, beginning in February.
The move had left investors worried as the brands accounted for about 13 percent of the $41 billion of auto loans and leases Ally made in 2014.
Ally, which also lost exclusive agreements over the past two years with Chrysler, has been working to increase its market share among other brands such as Ford Motor Co and Nissan Motor Co Ltd.
Excluding repositioning items, Ally reported core pre-tax income of $490 million, up from $339 million a year earlier.
On an adjusted basis, the company earned 52 cents per share, beating analysts' estimate of 42 cents per share, according to Thomson Reuters I/B/E/S.
Total non-interest expense fell 2.5 percent to $695 million.
General Motors Financial reported a 23 percent jump in quarterly revenue last week, as it benefited from the automaker's efforts to bolster its lending operations.
Ally said on Monday it became the preferred financing source for Mitsubishi Motors in the United States, replacing the Japanese carmaker's captive finance company, Mitsubishi Motors Credit of America Inc.